PRESS RELEASE: FEBRUARY 14, 2006

Asda Wal-Mart has been fined £850,000 in the UK for offering employees a pay rise to give up union rights, spelling a PR disaster for the company already suffering from a scathing US documentary circuiting Europe.

A British employment tribunal found the American-owned supermarket chain guilty of promising 340 distribution staff a 10 per cent pay rise to give up the collective agreement negotiated by their union an act which is illegal under 1992 labour relations law.

The court ordered Asda to pay £2,500 to each employee at the County Durham depot, but the worlds largest retailer looks likely to appeal.

A spokesperson said: "We're disappointed with the decision. We're currently considering the 88-page judgement and whether we appeal."

The conflict started when Asda took over the depot and tried to bring staff conditions in line with its other distribution centres across the North East.

A union agreement was drawn up covering workers rights under the new management, allegedly prompting the retailer to offer employees a paid incentive to weaken GMB resolve.

But Asda stresses the deal was "absolutely not about the removal of collective bargaining - it was simply a way of consulting our people as to whether they wanted to move into line with the employment terms at the Asda depot next door."

Meanwhile Paul Kenny, GMB acting general secretary said: "The Asda management need to take a clear message from [the tribunal]. GMB is not going away and the union will fight on every front to protect our member's rights".

The supermarket is currently feeling the heat elsewhere in Europe, as Wal-Mart: The High Cost of Low Price received rapturous praise at the Berlin film festival over the weekend.

The documentary, made by maverick American director Robert Greenwald, tells the stories of aggrieved employees and small retailers who have suffered under monopolisation by the supermarket heavyweight.

An east London fruit seller also features in the film, which will enjoy Europe-wide general release this April.

Greenwald told audiences in Germany: "Wal-Mart is the poster child for the worst in corporate behaviour."

"They have a culture that says its OK to do anything as long as its good for profits."

But its UK subsidiary is also no stranger to bad publicity. Last year Asdas treatment of workers was widely condemned by unions and charities claiming the firm had drawn up a "chip away strategy" to reduce costs and increase productivity.

According to leaked documents acquired by UK-based charity War on Want in October, the company wants to remove the right of staff to take industrial disputes to the arbitration service and implement the use of single man loading' for jobs that involve lifting, even though Asda's own risk assessment acknowledges the need for two people to undertake such tasks.

And the latest row to erupt between workers and the company saw GMB officials telling senior management they were furious that 100,000 out of 140,000 employees will not be receiving a bonus despite £650 million profits last year, signaling a huge internal backlash for the company.

Wal-Mart is the leading US food retailer and has a global turnover of $160 billion, employing 1.5mn workers. In the UK Asda Wal-Mart holds second place behind Tesco, with a market share of 16.7 per cent.